Gold ends lower after briefly topping $1,400

SAN FRANCISCO (MarketWatch) — Gold prices finished lower on Monday, after briefly pushing past $1,400 an ounce, as investors digested a weaker-than-expected durable-goods report, as well as data last week that showed a record daily inflow for gold exchange-traded products.

Gold for December delivery
US:GCZ3
fell $2.70, or 0.2%, to settle at $1,393.10 an ounce on the Comex division of the New York Mercantile Exchange. Prices for the most-active contract closed Friday at their highest level since early June, according to FactSet data.

Gold futures on Friday surged 1.8%, as “surprisingly weak new-home sales figures in the U.S. during July may be a concern for the Fed, and this is supporting the gold price,” CMC Markets chief market analyst Ric Spooner said in a note Monday.

Federal Reserve officials wrapped up their annual retreat this weekend in Jackson Hole, Wyo., and experts attending the conference said it appears the Fed is still aiming to taper asset purchases at its September meeting.

Interest in gold ETFs grow

Meanwhile, there are signs that investors are moving back into gold.

Analysts at Barclays said exchange-traded products recorded their biggest daily inflow since Jan. 1 on Friday at 5.8 metric tons, with holdings of SPDR Gold Trust
GLD, -0.09%
rising by 6.6 metric tons.

“Flows for the month-to-date remain negative at 17 tonnes but the pace of outflows has showed signs of slowing as equity markets have weakened and prices have risen, meaning fewer ETPs are loss-making,” said analysts at Barclays, in a note on Monday.

“Given that we continue to expect tapering to be announced in September and that we expect the dollar to strengthen, ETP holdings are likely to remain fragile but flows will remain a key area to track.”

Data from the Commodity Futures Trading Commission for the week to Aug. 20 showed money managers increased bets that gold prices would extend gains. Analysts at Barclays said this was in part due to short coverings, but fresh long positions were also being established.

“Gross short positions are now at their lowest since April, suggesting the scope for further aggressive short covering may slow,” said Barclays analysts, who added that after weaker-than-expected U.S. new-home sales, it will be key to track if gold sentiment is changing and those fresh longs continue to build.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.